There are some misconceptions about the law that I have seen over and over. I get it — the law does not always behave the way common sense would dictate.
Regardless of whether the law makes sense to us, we are all required to abide by it. And in my business, where we help families navigate life and the legal process after the death, disability, or aging of a loved one, there are often planning opportunities to avoid an unexpected result.
In order to plan around the law, you have to know what the law prescribes. So, I present to you the top four myths about what happens (legally) when a Georgia resident dies.
1. No will? Your spouse gets everything anyway.
You and your spouse are a team. What’s yours is mine, and what’s mine is yours, right?
Wrong. Georgia law provides that if you pass away without a will and you are survived by your spouse and your children, your spouse and your children split your worldly possessions, with your spouse receiving no less than 1/3 of your assets. This is true whether your children are adults or minors.
I know – you’d want your spouse to take care of your minor children (and the kids’ money), if something happened to you. And that is what will happen, but it is a lot more complicated than you likely realize. For example, your spouse would have to make a budget for your children’s needs and present that budget to the Probate Court before he or she could spend the children’s share of the money for their needs. Yes, even if your spouse is the biological parent of your minor children. Yes, I understand that is probably not what you would want, if you could pick.
The good news? You can pick what happens to your assets and, more importantly, your kids – by creating a will with the help of an attorney who specializes in the area. (P.S. I’d personally be honored to help.)
2. Have a will? Great! No need to go to the Probate Court.
Ok, don’t stop reading on me now. Now that you know that Georgia law does not provide that your spouse inherits everything when you pass away, you have added, “Call Mandy Moyer about getting a will done,” to your to-do list. So, when you’re no longer with us, your family will be set. Just pull the will out of the binder, read it, and follow your instructions from the great beyond, right?
Wrong. This is a major misconception, and I’m making it part of my mission in 2020 to spread the word. Having a will does not mean your family gets to avoid the Probate Court and the legal process that we call “probate.” In fact, your will is not legally effective, and your nominated executor or personal representative (the guy or gal in charge according to your will) does not have authority to act on your behalf until (1) you pass away, (2) your will is formally presented to the Probate Court, and (3) the Probate Court accepts your will and declares it to be your true and valid last will and testament.
Georgia’s probate process is neither incredibly time-consuming nor unduly expensive, so I don’t generally counsel my clients to avoid the probate process just because they can. That said, if there are other considerations like an unruly family member or a need for increased privacy (because the probate process is public record), it is possible to avoid the probate process when you pass away. But you’ll need a well-written, fully-funded trust to do so – not just a will.
3. No will? The state takes everything.
“My loved one passed away and he did not have a will. Is there anything I can do to prevent the state of Georgia from taking everything?”
The good news is Georgia only takes everything in a couple of relatively rare circumstances: (1) No family member exists. Like not even a remote cousin, twice removed. And (2) to repay themselves (or more accurately, Georgia’s Medicaid program) for the cost of nursing home care provided to your loved one during his or her lifetime. (This is the “Medicaid Estate Recovery” program.)
If your loved one died without a will, and wasn’t receiving Medicaid services (which is different than the Medicare program which provides medical insurance to Georgia’s seniors), then it is very unlikely that the state will receive any of his or her assets. Instead, his or her closest family members will be entitled to inherit from him or her.
4. Debts are inherited by the family.
Debts of a deceased family member, unlike assets, are not inherited by the surviving family members. Let’s break that down further. Debts of a deceased loved one must be paid. But only from the deceased person’s assets.
So, if your loved one passes away with little or no assets, then his or her debts are to be paid from whatever assets he or she owned at the time of the death. If there’s not enough in the estate, no family member (not even his or her spouse) is obligated to fulfill those debts from their own pocket. (The exception would be if the spouse was a joint borrower or otherwise obligated to pay the debt by some action that they took agreeing to be financially responsible for the debt.)
As you can see, what you don’t know can hurt you (and your family). It’s important to be proactive about protecting your family from life’s unexpected events, and resolution season is a great time to cross “protect my family by creating a Will” off your To Do List. We’d be happy to help you in the new year.